Apple increased R&D spending by $1 billion in 2012

Administrator

23:49, November 2, 2012

Apple published its annual Form 10-K for 2012, a detailed (and tedious) fiscal report for investors required by the Securities and Exchange Commission. Along with a summary of numbers for the past three years, the filing reveals spending on research and development has grown significantly to $3.4 billion—an increase of $1 billion over 2011. Apple has added the equivalent of nearly 13,000 employees over the last year, the majority of which staff its nearly 400 retail stores worldwide.

Other numbers have increased significantly as well. Apple is sitting on $121 billion worth of cash and equivalents, up from $81 billion at the end of fiscal 2011 and more than double the $51 billion hoard it was sitting on in fiscal 2010. Total sales were $156 billion, up 45 percent year-over-year from $108 billion. Profits totaled $41.7 billion, up 61 percent year-over-year. Gross margins for 2012 were 43.9 percent, up from 40.5 percent (and still much higher than most competitors).

Still, Apple notes it faces significant risks to its overall stellar financial health. In particular, the company noted competition in computers and mobile devices is getting stiffer by the minute.

"The Company expects competition in these markets to intensify significantly as competitors attempt to imitate some of the features of the Company’s products and applications within their own products or, alternatively, collaborate with each other to offer solutions that are more competitive than those they currently offer," Apple noted in its report. "These markets are characterized by aggressive pricing practices, frequent product introductions, evolving design approaches and technologies, rapid adoption of technological and product advancements by competitors, and price sensitivity on the part of consumers and businesses."

Apple also acknowledges new and ongoing intellectual property lawsuits will continue to be a drain on company resources. "Such litigation is often expensive, time-consuming, disruptive to the Company’s operations, and distracting to management. In certain cases, the Company may consider the desirability of entering into licensing agreements, although no assurance can be given that such licenses can be obtained on acceptable terms or that litigation will not occur."

Developers take note: Apple definitely values your contributions to both its iOS and Mac platforms, even if the company's actions may sometimes seem to be developer-hostile. "The Company’s future performance depends in part on support from third-party software developers. If third-party software applications and services cease to be developed and maintained for the Company’s products, customers may choose not to buy the Company’s products."